SUPER DIAMOND TOOLS Vs. STATE OF GUJARAT

JUDGEMENT

(1.) THIS reference made by the Gujarat Sales Tax Tribunal (hereinafter called "the Tribunal") at the instance of the assessee under section 69 of the Gujarat Sales Tax Act, 1969 (hereinafter referred to as "the Act"), raises the question of interpretation of the word "rods" in entry 27 of Schedule II-Part A of the Act. In order to appreciate the question which arises for determination, it would be necessary to set out a few facts.

(2.) THE assessee is a firm holding registration certificate under the Act. It deals in goods or articles meant for use in the diamond industry. Amongst the goods or articles in which the assessee deals are included what are described by the assessee as copper bars or pieces of copper bars of nine-gauge size. THEse copper bars or pieces of copper bars, according to the assessee, are used as spare parts or accessories in the machinery used for polishing diamonds. THE part of the machinery in which the aforesaid goods or articles are used is known as "angur" or "eyelet". THE assessee sold certain quantity of the aforesaid goods or articles to two different parties under two separate bills each dated 21st September, 1972. On 23rd September, 1972, the assessee made an application to the Commissioner of Sales Tax to determine the rate of tax on the sales of goods or articles under the aforesaid two bills. Along with the said application the assessee enclosed the two bills in question. THE application was heard by the Deputy Commissioner of Sales Tax. It was the case of the assessee before the Deputy Commissioner that the goods or articles were covered by entry 36 of the Government notification dated 29th April, 1970, issued under section 49 read with entry 16 (1) of Schedule II-Part A of the Act inasmuch as they were spare parts or accessories of machinery used in the polishing of diamonds. Alternatively, the contention of the assessee was that the goods or articles were covered by entry 27 of Schedule II-Part A since they were wire rods manufactured out of copper, which is a non-ferrous metal, and that as such they were "rods" within the meaning of the said entry 27. Both these contentions were negatived by the Deputy Commissioner. So far as the contention based on entry 27 is concerned, the Deputy Commissioner held that the said entry specifically mentions bars and rods separately, although there is no substantial difference between the two and in commercial parlance both are considered as bars and that if the legislative intention was to include in the said entry wire rods in addition to rods, wire rods would also have been specifically mentioned in the said entry. Be it noted, however, that the Deputy Commissioner failed to record a positive finding on the question of fact whether or not the goods or items sold under the two bills in question were, in fact, wire rods. As regards the contention based on entry 36, we need not give the gist of the reasoning of the Deputy Commissioner because at this stage of the proceeding the case has not been rested on the said entry. THE assessee, feeling aggrieved by the determination of the Deputy Commissioner, carried the matter in appeal before the Tribunal. THE Tribunal also took the view that when the legislature has made a distinction between bar and rod in entry 27, wire rods could not be taken as covered by the term "rods". Be it noted that even the Tribunal, however, failed to consider the question whether the articles or goods which were sold by the assessee were in fact wire rods. THE result, therefore, was that the assessee's case that the articles or goods in question were covered, inter alia, by entry 27 was not found to be acceptable by both the authorities, which found that entry 13 of Schedule III governed the sales in question.

(3.) IT would be convenient at this stage to set out the relevant entries.